The tangible benefits of the Uruguay Round may not be felt for years, but the deal banishes the threat of a descent into protectionism and tit-for-tat trade wars.
In the next few years, some 400,000 jobs, according to one plausible survey, could be created in Britain. Economic research asserts that businesses and consumers in the European Union will emerge as the world's biggest beneficiaries from the new trade regime.
Further downward pressure on prices may emerge. The pounds 300-per-head cost of sustaining food mountains in the EU will, for instance, tumble and take food prices down in its wake. Tariffs on foreign goods will also subside, reducing prices for a whole range of goods for European consumers. A Gatt deal, in addition, removes the risk of higher prices which would follow increased protectionism.
If the Gatt talks had failed, confidence would have been the first victim as uncertainty over government trade policies grew. Crumbling confidence would probably have meant lower investment and eventually weakening consumption.
Now, however, businesses which held back investment and expansion plans as the Gatt talks dragged on are more likely to press ahead with their plans. Ultimately, a rise in business optimism should feed through to consumer sentiment as uncertainty over the future diminishes. Research by the Massachusetts Institute of Technology showed that the greatest period of 20th century trade liberalisation, from 1950 to 1973, saw not only the quickest rate of growth in world trade but also the fastest growth rates for output, capital investment and productivity for more than a century.
There is plenty of historical evidence to support the conclusion that, in the long term, the benefits to the world economy from freer trade are significant. The Organisation for Economic Co-operation and Development and the World Bank estimate that the annual gain in global income could range between dollars 210bn (pounds 141bn) and dollars 270bn by the year 2002. Even these figures, derided by some economists as 'science fiction', may prove to be underestimates because the studies do not take account of the liberalisation of trade in services, increasingly the mainstay of most industrialised economies, under the Uruguay Round.
But in the short run, fresh worries over job prospects could emerge as industries are forced by a more liberal trade regime and more intensive competition to become lean and low-cost.
The dismantling of trade barriers under the new Gatt regime is, moreover, likely to speed up the globalisation of the world economy. Although barriers to trade are still being broken down, capital can move more or less freely across the globe. Over the past few years, capital has become increasingly footloose, moving rapidly to countries or regions where the greatest profits are available. The speed with which capital now moves offers little time for societies to adjust to the resulting economic and social upheaval. The coal industry has taken decades to expire in Britain, but the severe impact of Gatt and globalisation on the unprofitable high-cost European car industry may be swifter.